Banners flutter across the freeways in Beijing. Posters hang from the walls of the media center for China’s foreign policy pageant of the year.

Later this week, the Second Belt and Road Forum rolls into town at the National Convention Center with President Xi Jinping delivering his traditional keynote speech to a host of foreign dignitaries.

Critics of the BRI cite concerns of unsustainable debt and a lack of transparency, comparing the program to a glorified game of loans with hidden strings attached.

Converts insist it is a worldwide phenomenon.

“At the top of Beijing’s priorities is a liberal economic order built on free trade,” Yan Xuetong, the dean of the Institute of International Relations at Tsinghua University, said in his seminal paper, The Age of Uneasy Peace. “China’s economic transformation over the past decades from an agricultural society to a major global powerhouse was built on exports.

“The country has slowly worked its way up the value chain, its exports are beginning to compete with those of highly advanced economies,” he continued. “China’s exports are vital to its economic and political success [and] one should expect Beijing to double down on its attempts to gain and maintain access to foreign markets.

“This strategic impetus is at the heart of the Belt and Road Initiative, through which China hopes to develop a vast network of land and sea routes that will connect its export hubs to far-flung markets. At its 2017 National Congress, the Chinese Communist Party went so far as to enshrine a commitment to the initiative in its constitution – a signal that the Party views the infrastructure project as more than a regular foreign policy,” Yan, a highly influential academic, added.

Media hype

Launched in a fanfare of state-media hype by Xi in 2013, this epic venture has become an extension of Beijing’s global ambitions.

Crucial to the program are strands of ‘New Silk Road’ superhighways connecting China with 70 countries and 4.4 billion people across Asia, Africa, the Middle East and Europe in a maze of multi-trillion-dollar infrastructure projects, including a web of digital links.

Yet during the past 18 months, the BRI has become highly controversial after being branded a “debt trap” by the United States and its key Western allies. Even the International Monetary Fund and the World Bank have called for more transparency about loan arrangements after highlighting the risks of excessive borrowing.

“Both the [World] Bank and the IMF are working together in order to bring about more transparency and be better able to identify debt out there, terms and conditions, volumes and maturities,” Christine Lagarde, the head of the IMF, told a media conference earlier this month.

“We are constantly encouraging both borrowers and lenders to align as much as possible with the debt principles [set by international organizations such as the Paris Club and Group of 20],” she added.

Last year, a study written by Harvard scholars Sam Parker and Gabrielle Chefitz went even further and warned the US State Department of the impact of what are perceived to be cheap loans, calling it “debt book diplomacy.”

In another report entitled Examining the Debt Implications of the Belt and Road Initiative from a Policy Perspective, the Center for Global Development singled out 23 countries that could be prone to “debt distress.”

Of the group, Pakistan, Djibouti, the Maldives, Laos, Mongolia, Montenegro, Tajikistan and Kyrgyzstan were rated in the “high risk” category.

“Belt and Road provides something that countries desperately want – financing for infrastructure,” John Hurley, a visiting fellow at the Washington-based think tank and co-author of the study along with Scott Morris and Gailyn Portelance, said in a statement. “But when it comes to this type of lending, there can be too much of a good thing.”

This was brought into sharp focus when Sri Lanka handed over control of the Hambantota Port, which was financed by loans, to China’s state-owned Merchants Port Holdings, at the end of 2017.

The country was in the “Group of 23,” while the 99-year lease deal with Beijing enraged Sri Lankan government critics at the time for threatening the nation’s sovereignty.

“The price being paid for reducing the China debt could prove more costly than the debt burden Sri Lanka seeks to reduce,” N Sathiya Moorthy, a senior fellow specializing in Sri Lanka at the Observer Research Foundation in New Dehli, said.

Pakistan, the report claimed, was “by far the largest nation at high risk,” estimating that BRI financing was around US$50 billion in infrastructure and energy projects.

These included Gwadar Port, which is one of several major developments in the region that make up the China-Pakistan Economic Corridor. “Adding to Pakistan’s risk are the relatively high-interest rates being charged by China,” the Center for Global Development stated.

Another loser

Ashraf Mahmood, the then governor of the State Bank of Pakistan, delivered a haunting statement back in 2015. Perplexed by Chinese investment pouring into the country, he confessed: “I don’t know out of the $46 billion how much is debt, how much is equity and how much is in kind.”

Zambia’s appears to be another loser when it comes to bingo borrowing. The Southern African country has debts of $13 billion with analysts estimating that Belt and Road loans account for between a quarter and a third of that total after an infrastructure binge.

In response, China has pointed out that the BRI is working with nations neglected by the United States and the European Union after being starved of investment.

“This partnership relationship is not a geopolitical tool, but a platform for cooperation,” Wang Yi, a member of the influential State Council and a leading diplomat, said. “You can’t put hats like ‘debt crises’ onto the head of the Belt and Road, and this is not something any participating country would recognize.”

Still, Beijing is looking to one of America’s staunchest allies, the United Kingdom, to add a veneer of transparency to the New Silk Roads.

The UK’s Department for International Development is seen as the ideal model for China’s fledgling International Development Cooperation Agency.

“Britain has played a leading role in the establishment and management of the Asian Infrastructure Investment Bank,” China’s Ambassador Liu Xiaoming told London’s Evening Standard. “In [the Belt and Road] development, Britain could have a big role to play in ensuring that the projects are of higher quality, at a higher standard, with a higher return.”

This message has not been lost in Westminster.

“China’s proposal to set up a ‘Multilateral Cooperation Centre for Development Finance’ has real potential to ensure its huge investments in developing countries meet the key international standards that matter to all of us – on debt, transparency, environment and social safeguards,” Penny Mordaunt, the UK International Development Secretary, said at the World Bank Spring Meeting earlier this month.

But Beijing needs to start turning Xi’s opening address at the First Belt and Road Forum last year into concrete action, according to Human Rights Watch.

In Beijing, he talked about the “glory of the ancient silk routes,” and embarking “on a path leading to friendship, shared development, peace, harmony and a better future.”

Yet this vision has yet to take shape, Human Rights Watch point out.

“Beijing claims it is committed to working with other countries to foster environment-friendly and sound development, but the practice so far has raised some serious concerns,” Yaqiu Wang, a China researcher at the non-governmental organization, said.

“Criticisms of some Belt and Road projects – such as lack of transparency, disregard of community concerns, and threats of environmental degradation – suggest a superficial commitment,” Wang added.

How this will play out at the two-day talkfest is open to debate. But already a key theme will involve “sustainable finance,” according to media reports. Cue Xi.